Sept. 8 (Bloomberg) -- Lehman Brothers Holdings Inc. fell almost 13 percent in New York trading after analysts predicted larger writedowns and lower underwriting revenue.

Lehman dropped $2.05 to $14.15 at 4 p.m. in New York Stock Exchange composite trading after Merrill Lynch & Co. analyst Guy Moszkowski said the firm may report a loss of $6.50 a share, wider than his earlier third-quarter loss estimate of $3.94 a share. Oppenheimer & Co. analyst Meredith Whitney said Lehman could take a $4 billion writedown on residential and commercial mortgages and leverage loans.

``The primary drivers for these revisions are writedowns, customer volumes, overall weak global equity markets, and weak advisory and underwriting revenues,'' Whitney wrote today in a research note.

Analysts have been cutting profit estimates for banks and brokerages as mortgage-asset values continue dropping and demand for the firms' services wanes. Financial firms worldwide have posted $505.9 billion in writedowns and losses since the start of 2007. Lehman Chief Executive Officer Richard Fuld is under pressure to raise capital and shed devalued real-estate assets before the firm reports third-quarter financial results.

Lehman, once the biggest U.S. underwriter of mortgage-backed securities, plans to announce ``key strategic initiatives'' when it reports the third-quarter figures on Sept. 18, the company said today in a statement. It didn't specify the nature of the initiatives.

KDB, KKR, Carlyle

The firm has been in talks with Korea Development Bank for a possible capital infusion as well as with Kohlberg Kravis Roberts & Co., Carlyle Group and other private equity firms interested in buying its asset-management unit, which includes fund manager Neuberger Berman. Nomura Holdings Inc. may join bidders seeking a stake in Lehman, a spokesman for Japan's biggest investment bank told the Yomiuri newspaper last week.

``People were looking forward to something coming out of the company over the weekend to clarify their capital situation and yet again nothing has happened,'' said Steve Sosnick, equity risk manager at Timber Hill LLC, the market-making unit of Interactive Brokers Group Inc. in Greenwich, Connecticut. ``If they are still entertaining the idea of selling Neuberger, that's a worst-case scenario from an ongoing business point of view and the market is viewing that negatively.''

Lehman shuffled its top ranks for the third time in four months, as Jeremy M. Isaacs, head of international operations, and Andrew Morton, the fixed-income chief, are leaving.

Trading Volume

Goldman Sachs Group Inc., Morgan Stanley and Merrill rose after the U.S. Treasury's takeover of mortgage-finance companies Fannie Mae and Freddie Mac helped improve sentiment and analysts upgraded some of the stocks.

Merrill gained 3.2 percent to $27.59 at 4 p.m. in New York composite trading. Goldman rose 4 percent and Morgan Stanley rose 4.6 percent. All the firms are based in New York.

Whitney also cut her third-quarter earnings estimates for Goldman and Merrill, citing a decline in trading volumes and share sales.

Moszkowski upgraded Goldman from ``underperform'' to ``buy,'' citing improved sentiment in the banking industry. Lehman's rating was changed from ``underperform'' to ``neutral.''

Treasury Secretary Henry Paulson and Federal Housing Finance Agency Director James Lockhart yesterday placed Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac in a conservatorship, ousting their chief executives and eliminating dividends. The Treasury may purchase up to $200 billion of stock in the government-sponsored enterprises to keep them solvent.

`Positive' Action

``The Treasury's weekend GSE move removes considerable uncertainty from residential mortgage markets by ensuring that a market for conforming paper will be available,'' Moszkowski wrote today in a research note about Lehman.

Sanford C. Bernstein & Co. analyst Bradley Hintz said the government's action was ``positive'' for the credit markets and could ``provide the encouragement needed to bring fixed-income investors back to the credit markets, reduce risk-aversion and thus improve market liquidity.''

Brokers have made $603 million from underwriting shares of Fannie and Freddie, and $1.5 billion for all of 2007, Hintz wrote. Total revenue for the four biggest securities firms was $322 million, giving them ``only limited bottom line impact.''

Hintz rates Lehman, Merrill Lynch and Goldman Sachs ``market perform'' and Morgan Stanley ``outperform.''

To contact the reporter on this story: Elizabeth Hester in New York at ehester@bloomberg.net.

Last Updated: September 8, 2008 16:11 EDT